The All India Organisation of Chemists and Druggists (AIOCD) is likely to announce a nation wide one day token strike to protest against the government decision to include drugs in the general category and slap 12.5 % sales tax once the value added tax (VAT) regime is in place. With the center announcing its plans to go for VAT from April 1, 2003, the chemists across the country has begun to feel the pinch of the additional burden they have to take up. The chemists also point out that the renewed tax structure would result in a substantial increase in drug prices.
Speaking to Pharmabiz.com, Sandeep Nangia, organizing secretary, AIOCD and president, Retailers & Distributors Chemists Association of National Capital Territory of Delhi (RDCA) said that the apex organization has called for a meeting of all state presidents of AIOCD on the 10th and 11th of this month at Mumbai to chalk out its programmes to counter the issues raising due to the implementation of VAT.
The chemists feel that the sale of medicines should be considered separately by the central government. "We want the government to realize that drug trade is controlled by the Drugs Price Control Order (DPCO) and we are not overcharging the drugs at any point. VAT should be wavered in our case and the government should collect the entire tax based on MRP from the first point itself," he said.
Let the government go for MRP inclusive of all taxes for all medicines. Once the prices are uniform across the country and the tax is collected as per the MRP, the entire procedure becomes easy. The government should also review the plans to levy 12.5 % tax on medicines. Instead it should be just 4 %, thereby reducing the possible increase in drug prices, he opined.
Nangia said that the association would be representing the government with these three points. The first being uniform MRP across the country, the second uniform tax structure all over India and the third demand for shifting medicines from general category to special category which calls for just 4% tax.
The secretary felt that the government is yet to consider the Rs 20,000 crore medicine industry as an entity on its own.
Regarding the implementation of VAT, he expressed doubt about the government's preparedness. "As per the announcements the new systems has to be in place within three weeks now. But none in the government can now clearly say what are the specific changes that are to be made for enabling a smooth transition from the current tax regime to the VAT.
"The Delhi government is yet to have a clear policy in place. Being a distribution center with nominal manufacturing activities, the government of national capital territory would be least interested in implementing the change," he opined.